Warner Music mulls IPO - report

CBSMarketWatch

SAN FRANCISCO (CBS.MW) -- Warner Music is considering an initial public offering that could be worth as much as $5 billion, according to a published report.

The world's fourth-largest music group could do the offering as early as next spring, the Financial Times reported, citing people involved in the situation.

Warner Music could be setting the stage for merger discussions, once again, with British music giant EMI Group (EMI), the FT said. EMI has tried on two other occasions to merge with Warner Music.

Time Warner
TWX, -1.28%
sold Warner Music earlier this year to a consortium led by Edgar Bronfman, ex-vice chairman of Vivendi Universal
V, -1.06%
for $2.6 billion.

Time Warner's decision reflects the difficulties facing large modern music groups. Profit margins have shrunk considerably in the wake of the music downloading revolution. Some groups cut their CD prices in response to the situation, and Apple's iTunes is one of several services, operated in collaboration with the music labels, that allow users to download songs for 99 cents each.

Some long-time observers of the music scene even wonder if an overall decline in the artistic quality of new music has been a factor in the decline of CD sales. See related story.

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